UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
Current report
pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2018
TriCo Bancshares
(Exact name of registrant as specified in its charter)
California | 0-10661 | 94-2792841 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File No.) |
(I.R.S. Employer Identification No.) | ||
63 Constitution Drive, Chico, California | 95973 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (530) 898-0300
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 | Regulation FD Disclosure |
TriCo Bancshares (the Company), the holding company of Tri Counties Bank (the Bank), a wholly owned banking subsidiary, will be presenting to or conducting one-on-one meetings with investors, analysts or other third parties about the Company and its latest financial results at the D.A. Davidson Financial Institutions Conference. A copy of the presentation slides, substantially in the form expected to be used in such presentations and meetings, is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The presentation replaces and supersedes investor presentation materials previously furnished as an exhibit to the Companys Current Reports on Form 8-K.
The presentation is also available on the Companys web site at www.tcbk.com.
Information contained herein, including Exhibit 99.1, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, as amended, nor shall such information and Exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 8.01 | Regulation FD Disclosure |
The only information contained in this Form 8-K being filed for the purposes of Rule 425 under the Securities Act is the information relating solely to the proposed merger between the Company and FNB Bancorp contained in the presentation furnished herewith as Exhibit 99.1 and is being filed under this Item 8.01.
Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
99.1 | Investor Presentation |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TRICO BANCSHARES | ||||||
Date: May 10, 2018 | By | /s/ Richard P. Smith | ||||
Richard P. Smith, President and Chief Executive Officer |
Exhibit 99.1
|
D.A. Davidson Financial Institutions Conference Richard P. Smith President & CEO John S. Fleshood Executive Vice President & COO Daniel K. Bailey EVP Chief Retail Banking Officer May 8-10, 2018 Service With Solutions Trico Bancshares
SAFE HARBOR STATEMENT Certain comments included in this presentation may involve forward-looking statements, for which TriCo Bancshares (TriCo or the Company) claims the protection of the safe harbor provisions credited by Federal securities laws. Such forward-looking statements are subject to risks and uncertainties which may cause TriCos actual results to differ materially from those contemplated by such statements. Additional information concerning certain of these risks and uncertainties are described in TriCos Annual Report of Form 10-K for the fiscal year ended December 31, 2017, TriCos Quarterly Reports on Form 10-Q as filed with the SEC in 2018 and Amendment No. 1 to TriCos Registration Statement on Form S-4 filed on April 18, 2018. The statements contained herein that are not historical facts are forward-looking statements based on managements current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. In addition to factors previously disclosed in reports and other filings filed by the Company and FNBB with the SEC, risks and uncertainties for the Company, FNBB and the combined company include, but are not limited to: the possibility that any of the anticipated benefits of the proposed merger will not be realized or will not be realized within the expected time period; the risk that integration of FNBBs operations with those of the Company will be materially delayed or will be more costly or difficult than expected; the inability to close the merger in a timely manner; diversion of managements attention from ongoing business operations and opportunities; the failure to satisfy other conditions to comp letion of the merger, including receipt of required regulatory, shareholder or and other approvals; the failure of the proposed merger to close for any other reason; the challenges of integrating and retaining key employees; the effect of the announcement of the merger on the Companys, FNBBs or the combined companys respective customer relationships and operating results; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and general competitive, economic, political and market conditions and fluctuations. All forward-looking statements included in this filing are made as of the date hereof and are based on information available at the time of the filing. Except as required by law, neither the Company nor FNBB assumes any obligation to update any forward-looking statement. Proxy Solicitation The Company, FNBB, their directors, executive officers and certain other persons may be deemed to be participants in the solicitation of proxies from the Companys and FNBBs shareholders in favor of the approval of the merger. Information about the directors and executive officers of the Company and their ownership of the Companys common stock is set forth in the proxy statement for the Companys 2018 annual meeting of shareholders, as previously filed with the SEC on April 18, 2018. Information about the directors and executive officers of FNBB and their ownership of FNBB common stock is set forth in FNBBs Amendment No. 1 on Form 10-K/A, as previously filed with the SEC on April 20, 2018. Shareholders may obtain additional information regarding the interests of such participants by reading the registration statement and the proxy statement/prospectus when they become available. D.A. Davidson Financial Institutions Conference 2 | May 2018 Trico Bancshares
AGENDA Company Overview Recent Activities & Focus Key Revenue Drivers Challenges & Opportunities Financials Questions D.A. Davidson Financial Institutions Conference 3 | May 2018 Trico Bancshares
COMPANY OVERVIEW Asset Size: $4.8 Billion Location: Chico, CA Founded: 1975 Deposits: $4.1 Billion Loans (net): $3.0 Billion Customers: ~190,000 Bank Branches: 67* ATMs: 84 _____________________________________________________________________________ *includes our telephone banking center D.A. Davidson Financial Institutions Conference 4 | May 2018 Trico Bancshares
COMPANY OVERVIEW Nasdaq: TCBK *Stock Price: $37.37 Market Capitalization: $858 million *Price to Book stated: 1.7x *Price to TBVPS 2.0x **TCBK Asset Size Rank of CA Publicly Traded Banks: 16 Pro Forma TCBK+FNBG Rank: 13 D.A. Davidson Financial Institutions Conference 5 | May 2018 *Valuation Information as of Market Close 04/30/2018 **Ranking as of 12/31/2017 Source: SNL Financial Trico Bancshares
Davidson Financial Institutions Conference 6 | May 2018 EXECUTIVE TEAM Rick Smith President & CEO TriCo since 1993 John Fleshood EVP Chief Operating Officer TriCo since 2016 Dan Bailey EVP Chief Retail Banking Officer TriCo since 2007 Craig Carney EVP Chief Credit Officer TriCo since 1996 Tom Reddish EVP Chief Financial Officer TriCo since 1994 Richard OSullivan EVP Chief Commercial Lending Officer TriCo since 1984 Trico Bancshares
2017 ACCOMPLISHMENTS New deposit product line-up implemented in Q1 Strong fee revenue growth Year-over-year deposit fee income growth of 12.6% Several new technology projects for 2017: Implementing new consumer and mortgage loan origination technologies Loan and operational automation projects Leveraging 2016 core conversion investment into greater operating efficiencies Consistent deposit growth favorable mix and cost D.A. Davidson Financial Institutions Conference 7 | May 2018 Trico Bancshares
POSITIONED FOR TODAY, PREPARED FOR THE FUTURE D.A. Davidson Financial Institutions Conference Strong and growing bank capital Competitive product set to compete with banks both large and small Superior reputation versus large bank competitors Continue to see strong organic growth in current environment Loan growth of 11.3%* Deposit growth of 4.8%* 8 | May 2018 *03/31/2018 vs. 03/31/2017 Trico Bancshares
Strong focus on risk management and new regulatory realities Enterprise Risk Strong Focus on CRA HMDA Reporting Fair Lending Experienced project teams, well prepared for continued growth through acquisition D.A. Davidson Financial Institutions Conference 9 | May 2018 POSITIONED FOR TODAY, PREPARED FOR THE FUTURE continued Trico Bancshares
D.A. Davidson Financial Institutions Conference 10 | May 2018 WHAT IS LONG TERM SUCCESS? Rewarding our shareholders A winning culture with a motivated and talented work force (good people) Significant and growing market share Low cost core deposit base Strong credit culture Diversified revenue sources Efficient operations Strong risk management practices Trico Bancshares
KEY DRIVERS OF BANK REVENUES Deposits & Margin Average Cost of Deposits of 0.11% as of 03/31/2018 Net Interest Margin in Q1 2018 was 4.14% Commercial Loans Commercial Real Estate Diverse portfolio of property types and geographies Commercial & Industry Lines and Loans & Leases Agricultural Loans Asset-Based Loans Non-Interest Income Service Charge & Fee Income Mortgage Finance Bank Wealth Management Program D.A. Davidson Financial Institutions Conference 11 | May 2018 Trico Bancshares
KEY DRIVERS OF BANK REVENUES continued Consumer Loans Home Equity Lines/Loans Rising rates a positive for growth Small Business Growth Opportunities Wealth Management Bank Managed Program Raymond James as Broker-Dealer Mortgage Banking Merchant Fee Opportunities Higher Stock Valuations a Plus for M&A Activity D.A. Davidson Financial Institutions Conference 12 | May 2018 Trico Bancshares
Non Interest Bearing 33% Interest Demand 25% Savings 34% Time Deposits 8% Wtd. Avg. Rate 0.12% Wtd. Avg. Rate 0.08% Wtd. Avg. Rate 0.62% D.A. Davidson Financial Institutions Conference 13 | May 2018 DEPOSIT STRUCTURE Data as of 03.31.2018 Trico Bancshares
D.A. Davidson Financial Institutions Conference 14 | May 2018 TOTAL ENDING DEPOSITS $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 2013 2014 2015 2016 2017 Q1 2018 $2,410,483 $3,380,423 $3,631,266 $3,895,560 $4,009,131 $4,084,404 Data as of 03.31.2018 Trico Bancshares
D.A. Davidson Financial Institutions Conference 15 | May 2018 MARKET SHARE OF ALL BRANCHES SORTED BY ZIP CODE Rank Institution Name State (Hdqtrd) Charter Deposits ($000) Market Share 1 U.S. Bank National Association OH Federal 9,893,012 21.2% 2 Wells Fargo & Company SD Federal 8,782,186 18.8% 3 Bank of America, National Association NC Federal 6,017,267 12.9% 4 Tri Counties Bank CA State 3,881,355 8.3% 5 JP Morgan Chase Bank, National Association OH Federal 2,994,175 6.4% 6 MUFG Union Bank, National Association CA Federal 2,177,323 4.7% 7 Bank of the West CA State 1,832,370 3.9% 8 Umpqua Bank CA State 1,636,359 3.5% Trico Bancshares
NON-INTEREST INCOME Consistently Represents Approximately 25% of Total Bank Revenues Residential Home Mortgage Lending Refinances remain consistent Increasing numbers of purchase transactions and increasing overall activity for home loans Higher rates will slow refinance market in 2018 D.A. Davidson Financial Institutions Conference 16 | May 2018 Trico Bancshares
NON-INTEREST INCOME continued Wealth Management revenues Higher revenues from service charges and interchange income Cash Management fees continue to increase Merchant Card Services $1.2 million in 2017 D.A. Davidson Financial Institutions Conference 17 | May 2018 Trico Bancshares
CONSUMER LOANS Increased demand for consumer loans Home equity values have increased Borrowers using refinance of 1st mortgage to pay down debt Low rate environment led to historically high refi activity $37MM in Q1 2018 HELOC volume resulted in $6.5MM decrease in outstandings This is compared to $38MM in Q4 2017 volume resulting in a $3MM contraction Home equity lines/loans increasing in demand and may begin outpacing 1st lien refi volume soon D.A. Davidson Financial Institutions Conference 18 | May 2018 Trico Bancshares
D.A. Davidson Financial Institutions Conference 19 | May 2018 HOME EQUITY LOANS OUTSTANDING $300,000 $310,000 $320,000 $330,000 $340,000 $350,000 $360,000 $370,000 $380,000 $390,000 $400,000 2013 2014 2015 2016 2017 Q1 2018 $354,454 $383,898 $362,854 $331,537 $331,719 $325,183 Data as of 03.31.2018 Trico Bancshares
D.A. Davidson Financial Institutions Conference 20 | May 2018 LOAN PORTFOLIO BY TYPE Secured by RE - Residential 1-4 13% Secured By Commercial Real Estate [PERCENTAGE] Consumer - HELOCS 9% [CATEGORY NAME]uity [PERCENTAGE] Consumer - Other 1% Commercial 7% Construction - RE 2% [CATEGORY NAME] [PERCENTAGE] Data as of 03.31.2018 Trico Bancshares
COMMERCIAL BANKING Target loans of $2,000,000 to $15,000,000 Personalized banking Assigned Relationship Managers Assigned Cash Management Officers In-market lending Competition is as fierce and diverse as it has ever been D.A. Davidson Financial Institutions Conference 21 | May 2018 Trico Bancshares
COMMERCIAL BANKING continued Agricultural lending Drought risk has subsided Commodity prices have stabilized Loans <$1,000,000 served through alternate channel Business Relationship Managers Credit scoring combined with traditional underwriting SBA 7(a) program now offered D.A. Davidson Financial Institutions Conference 22 | May 2018 Trico Bancshares
D.A. Davidson Financial Institutions Conference 23 | May 2018 COMMERCIAL REAL ESTATE PORTFOLIO AS OF 03.31.2018 Real Estate Loan Type # of Loans Outstandings* % to Total Loans Avg. Commitment Amount Office 602 $426,934,000 14% $723,000 Multi-Family 333 $355,821,000 12% $1,130,000 Retail 418 $333,334,000 11% $837,000 Special Purpose Gas Station, Mini Storage, Hotel/Motel, Restaurant 237 $303,604,000 10% $1,352,000 Other Warehouse, Manufacturing, Bare Land, Agricultural Land + Structures 900 $542,071,000 18% $644,000 Totals 2,490 $1,961,764,000 64% - Average - - - $828,000 Trico Bancshares
AG PORTFOLIO AS OF 03.31.2018 D.A. Davidson Financial Institutions Conference 24 | May 2018 Agricultural Loans (excluding RE secured) total $48 million in total commitments with $20 million outstanding The highest crop concentrations by commitments are: Multiple Crop $14.3 million 16 loans $895,000 Avg. Commitment Rice $8.4 million 28 loans $300,000 Avg. Commitment Almonds $6.9 million 13 loans $528,000 Avg. Commitment Walnuts $4.2 million 6 loans $703,000 Avg. Commitment Beef $1.1 million 7 loans $151,000 Avg. Commitment Dairy $701 thousand 5 loans $140,000 Avg. Commitment Trico Bancshares
Construction lending totals approx. $145,550,000 outstanding with $377,787,000 in commitments Residential construction approx. $71,598,000 Commercial construction approx. $73,952,000 Total construction, land development and land acquisition loans represent 4.7% of total loans outstanding D.A. Davidson Financial Institutions Conference 25 | May 2018 CONSTRUCTION AND A&D Data as of 03.31.2018 Trico Bancshares
D.A. Davidson Financial Institutions Conference 26 | May 2018 TOTAL LOANS NET OF UNAMORTIZED DEFERRED LOAN FEES AND DISCOUNTS ($000S) $1,500,000 $1,700,000 $1,900,000 $2,100,000 $2,300,000 $2,500,000 $2,700,000 $2,900,000 $3,100,000 2013 2014 2015 2016 2017 Q1 2018 $1,672,007 $2,282,524 $2,522,937 $2,759,593 $3,015,165 $3,069,733 Data as of 03.31.2018 Trico Bancshares
Mergers and Acquisitions First National Bank of Northern California 2018 (Announced) 3 Branch purchase Bank of America 2016 North Valley Bancorp 2014 Citizens Bank of Northern California 2011 Granite Community Bank 2010 North State National Bank 2003 9 Branch purchase Wells Fargo 1997 Sutter Butte Savings 1996 Country National Bank 1993 Branch purchase from Wells Fargo 1987 Shasta County Bank 1981 D.A. Davidson Financial Institutions Conference 27 | May 2018 GROWTH OPPORTUNITIES Trico Bancshares
Deposit Betas Ability to Increase Loan Yields Interest Rate Risk Aggressive Competitors Compliance Regulations The Cost of Compliance with New Regulations Dysfunction in Washington D.A. Davidson Financial Institutions Conference 28 | May 2018 WHAT KEEPS US UP AT NIGHT? Trico Bancshares
Big Banks Aggressive banking in community bank space Bad reputations Large banks cost saving a new opportunity in rural markets Technology and Banking New technology is expensive New technology will streamline banking ultimately lowering costs Bank Operations and Efficiency Managing multiple delivery channels Enterprise Risk Management Many threats, so little time D.A. Davidson Financial Institutions Conference 29 | May 2018 CHALLENGES WITHIN BANK STRATEGIES Trico Bancshares
D.A. Davidson Financial Institutions Conference FINANCIALS Trico Bancshares
D.A. Davidson Financial Institutions Conference 31 | May 2018 TOTAL ASSETS ($000S) $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 $5,000,000 2013 2014 2015 2016 2017 Q1 2018 $2,744,066 $3,912,358 $4,220,722 $4,517,968 $4,761,315 $4,779,957 Data as of 03.31.2018 Trico Bancshares
0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 2013 2014 2015 2016 2017 Q1 2018 12.2% 12.2% 11.7% 11.6% 13.5% 14.4% 13.8% 13.7% 13.2% 13.0% 14.8% 15.6% 15.1% 14.8% 14.1% 13.9% 8.6% 9.1% 9.2% 9.1% 9.2% 9.1% Common Equity Tier 1 Tier 1 Total Risk Based Tangible Common D.A. Davidson Financial Institutions Conference 32 | May 2018 CAPITAL RATIOS ($000S) Data as of 03.31.2018 Trico Bancshares
D.A. Davidson Financial Institutions Conference 33 | May 2018 NET INCOME ($000S) Data as of 03.31.2018 $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 2013 2014 2015 2016 2017 2018 $8,477 $7,365 $8,336 $10,674 $12,079 $13,910 $6,325 $4,859 $11,366 $9,405 $13,589 $7,361 $8,234 $12,694 $12,199 $11,897 $5,236 $5,650 $11,422 $12,533 $2,989 Q1 Q2 Q3 Q4 Trico Bancshares
D.A. Davidson Financial Institutions Conference 34 | May 2018 NET INTEREST MARGIN Data as of 03.31.2018 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 2013 2014 2015 2016 2017 Q1 20180.15% 0.12% 0.10% 0.09% 0.10% 0.11% 4.18% 4.17% 4.39% 4.23% 4.22% 4.14% Wtd. Avg. Deposit Rate Net Interest Margin
Trico Bancshares D.A. Davidson Financial Institutions Conference 35 | May 2018 NON-INTEREST INCOME ($000S) Data as of 03.31.2018 $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 2013 2014 2015 2016 2017 2018 $7,352 $8,295 $10,180 $9,790 $11,703 $12,290 $9,127 $7,877 $12,080 $11,245 $12,910 $10,131 $8,589 $11,642 $11,066 $12,930 $10,219 $9,755 $11,445 $12,462 $12,478 Q1 Q2 Q3 Q4 Trico Bancshares
D.A. Davidson Financial Institutions Conference 36 | May 2018 EFFICIENCY RATIO (FULLY TAXABLE EQUIVALENT) Data as of 03.31.2018 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 2013 2014 2015 2016 2017 Q1 2018 67.3% 72.9% 64.7% 67.9% 65.5% 66.3% Trico Bancshares
D.A. Davidson Financial Institutions Conference 37 | May 2018 DILUTED EARNINGS PER SHARE Data as of 03.31.2018 $- $0.25 $0.50 $0.75 $1.00 $1.25 $1.50 $1.75 $2.00 2013 2014 2015 2016 2017 2018 $0.53 $0.45 $0.36 $0.46 $0.52 $0.60 $0.39 $0.30 $0.49 $0.41 $0.58 $0.45 $0.50 $0.55 $0.53 $0.51 $0.32 $0.25 $0.50 $0.54 $0.13 Q1 Q2 Q3 Q4 Trico Bancshares
D.A. Davidson Financial Institutions Conference 38 | May 2018 Data as of 03.31.2018 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 2013 2014 2015 2016 2017 20180.09 0.11 0.11 0.15 0.15 0.17 0.11 0.11 0.13 0.15 0.17 0.11 0.11 0.13 0.15 0.17 0.11 0.11 0.15 0.15 0.17 Q1 Q2 Q3 Q4 DIVIDENDS PAID Trico Bancshares
D.A. Davidson Financial Institutions Conference 39 | May 2018 NON-PERFORMING ASSETS TO TOTAL ASSETS Data as of 03.31.2018 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2013 2014 2015 2016 2017 Q1 2018 2.17% 1.34% 1.01% 0.53% 0.58% 0.54% Trico Bancshares
D.A. Davidson Financial Institutions Conference 40 | May 2018 ALLOWANCE FOR LOAN LOSSES TO TOTAL LOANS Data as of 03.31.2018 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2013 2014 2015 2016 2017 Q1 2018 2.29% 1.60% 1.43% 1.18% 1.01% 0.98% Trico Bancshares
D.A. Davidson Financial Institutions Conference 41 | May 2018 ORIGINATED ALLL TO TOTAL ORIGINATED LOANS Data as of 03.31.2018 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2013 2014 2015 2016 2017 Q1 2018 2.11% 1.85% 1.57% 1.19% 1.08% 1.05% Trico Bancshares
D.A. Davidson Financial Institutions Conference 42 | May 2018 ANNUALIZED NET CHARGE-OFFS TO AVERAGE LOANS Data as of 03.31.2018 -0.15% -0.10% -0.05% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 2013 2014 2015 2016 2017 2018 0.23% -0.13% -0.07% -0.10% [VALUE]* 0.02% *0.08% related to ASC 310-30 PCI loan adjustment Trico Bancshares
D.A. Davidson Financial Institutions Conference 43 | May 2018 Data as of 03.31.2018 RETURN ON AVERAGE ASSETS 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 2013 2014 2015 2016 2017 Q1 2018 1.04% 0.87% 1.11% 1.03% 0.89% 1.17% Trico Bancshares
D.A. Davidson Financial Institutions Conference 44 | May 2018 Data as of 03.31.2018 RETURN ON AVERAGE SHAREHOLDERS EQUITY 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 2013 2014 2015 2016 2017 Q1 2018 11.34% 8.67% 10.04% 9.47% 8.10% 11.00% trico bancshares
Acquisition of FNB Bancorp Announced December 11, 2017 trico bancshares
PREMIER NORCAL COMMUNITY BANK 46 December 2017 TCBK has an extensive presence throughout Northern California and the Central Valley with 66 branches FNBGs twelve branches across the SF Peninsula provide scale in a key Northern California market FNBG adds an established presence with a 50+ year history serving the SF Peninsula San Francisco is the economic hub of Northern California, located ~150 miles from TriCos headquarters in Chico, CA Significant business activity exists between San Francisco and other Northern California markets within TriCos footprint FNBG (12) D.A. Davidson Financial Institutions Conference trico bancshares
Other CA 31% Chico, CA 19% Redding, CA 17% Sacramento, CA 7% Truckee-Grass Valley, CA 5% San Francisco, CA 21% MARKET POSITION IN NORCAL 47 December 11, 2017 FNBG (SF Peninsula) FNBG and TriCo will create the largest Northern California-based community bank at over $6bn in assets TriCo currently has a dominant market share in several Northern California markets #1 ranked deposit market share in Chico and Redding MSAs (~25% of total market) Represent stable markets with low-cost, sticky deposits Top 5 market share position in 42% of TCBKs counties FNBGs San Francisco presence provides increased growth prospects with strong demographic trends Larger and thriving markets with affluent population base and significant business opportunities Ample scale with capacity to improve market penetration One of the largest, best-positioned community banks serving San Francisco TriCos recent expansion into Sacramento, CA complements San Francisco as a metro growth opportunity TCBK 2017 Deposits by MSA (pro forma) FNBG enables TCBK to enter the attractive Bay Area market with scale Rank Community Bank Rank Institution MRQ Total Assets ($mm) 1 Wells Fargo & Company $1,934,939 2 First Republic Bank 84,320 3 SVB Financial Group 50,754 4 1 TriCo Bancshares (Pro Forma) 6,100 5 2 Mechanics Bank 5,702 6 3 Westamerica Bancorporation 5,446 7 4 Luther Burbank Corporation 5,320 8 5 Fremont Bancorporation 3,870 9 6 Farmers & Merchants Bancorp 3,072 10 7 1867 Western Financial Corporation 2,907 trico bancshares
The Bay Areas $780 billion economy would rank 5th among all US states and 18th globally among all countries The Bay Area economy grew 5.2% in 2016, ~3x faster than the US rate At 3.3% unemployment the area is significantly below national averages The Bay Area is the #1 region in the U.S. for venture capital investment Tourism attracts ~25 million visitors annually accounting for ~$9.7B in spending More than 52% of the population holds a Bachelors degree or higher 25 Colleges and Universities are present in San Francisco Although led by tech, the Bay Area economy is supported by a diverse set of industries The Bay Area is home to 36 Fortune 500 companies, more than any other US region except New York Major employers include: Economy Major Employers Demographics With a population of ~7.6 million in the nine county region, the Bay Area represents ~20% of Californias residents Attractive demographic trends driven by strong population growth on a large, affluent population base BAY AREA OPPORTUNITY 48 December 11, 2017 2017 Median HHI Projected 5-Year Population Growth Projected 5-Year Median HHI Growth $104,239 $54,630 $71,061 $61,045 FNBG TCBK CA USA 5.0% 2.3% 4.1% 3.5% FNBG TCBK CA USA13.6% 9.9% 11.6% 8.9% FNBG TCBK CA USA Strong Demographics(1) Sources: The San Francisco Center for Economic Development, Center for Continuing Study of the California Economy and U.S. Bureau of Labor Statistics. (1)Median for zip codes in FNBGs and TCBKs footprint. D.A. trico bancshares Davidson Financial Institutions Conference
OVERVIEW OF FNB BANCORP 49 December 11, 2017 FNB Bancorp (NASDAQ: FNBG) is the bank holding company for First National Bank of Northern California Bank was founded in 1963 and is headquartered in South San Francisco, CA Largest community bank headquartered on the San Francisco Peninsula Twelve branches serving San Mateo, San Francisco and Santa Clara counties with 166 employees Longstanding, loyal customer and employee relationships developed over a 50+ year history Local, consultative and relationship-focused approach to banking Low-cost deposit base, liquid balance sheet and strong credit culture Community banking and lending approach that complements TriCos focus Maintained asset quality through the financial crisis with no dilutive common equity offering Company Background Financial Summary Source: SNL Financial. FNBG information as of 9/30/2017. Note: All dollars in millions for consolidated holding company. 1)Adjusted for an estimated $1.8mm pretax in non-recurring accelerated expense of FNBGs Management Continuity Agreements, less estimated ongoing accrual of $350,000 pretax. Balance Sheet ($ millions) Total Assets $1,275 Deposits 1,045 Gross Loans 839 Loans / Deposits 80.3 % 2-yr Loan CAGR 9.0 % Profitability (3Q17) Adj. ROAA(1) 1.12 % Adj. ROATCE(1) 12.5 Net Interest Margin 3.97 Efficiency Ratio 58.9 Asset Quality & Capital NPAs / Assets 0.66 % Reserves / NPLs 148.0 Reserves / Loans 1.22 TCE / TA 9.16 trico bancshares
50 December 11, 2017 Source: SNL Financial. TCBK and FNBG information for the quarter ended 9/30/2017. (1) Pro forma does not include purchase accounting or merger related adjustments. PRO FORMA LOAN & DEPOSIT MIX Loan Portfolio Highly Similar Lending Focus, Shared Credit Culture Deposit Base Maintains An Attractive Low- Cost Core Deposit Base With A Liquid Balance Sheet TCBK FNBG Pro Forma(1) TCBK FNBG Pro Forma(1) C & I CRE Construction & Land Residential Mortgage Home Equity Consumer & Other 7.8% 61.5% 5.0% 14.9% 9.9% 1.0% 6.2% 65.9% 5.9% 17.0% 3.7% 1.3% 7.4% 62.5% 5.2% 15.3% 8.5%1.1% Noninterest-bearing Deposits IB Demand, Savings & MMDA Retail Time Deposits (<$250k) Jumbo Time Deposits (>$250k) 32.7% 59.4% 6.0% 1.9% 29.6% 57.9% 7.2% 5.3% 32.1% 59.1% 6.3% 2.6% $3.9B Deposits 0.11% Cost of Deposits Loan / Deposits 74.7% $1.0B Deposits 0.29% Cost of Deposits Loan / Deposits 80.3% $5.0B Deposits 0.14% Cost of Deposits Loan / Deposits 75.9% $2.9B Loans 5.2% Yield on Loans $0.8B Loans 5.2% Yield on Loans $3.8B Loans 5.2% Yield on Loans D.A. Davidson Financial Institutions Conference trico bancshares
TRANSACTION ASSUMPTIONS 51 May 2018 Cost Savings Estimated at $8.7mm or 28% of FNBGs 2017e expense base Primarily driven by executive management and back office operations as well as significant IT savings from elimination of FNBGs in-house data processing function Retain branches and substantially all customer facing and business development personnel Cost savings estimates exclude impact of concluding FNBGs accelerated expense from Salary Continuation Agreements (1) and oneyear employment agreements with certain FNBG executives One-time Deal Costs Estimated at $12.5mm pretax, included in pro forma tangible book value calculation Minimal contract termination fees due to FNBGs in-house data processing function Relatively low transaction costs in aggregate FMV Adjustments Loan mark: $10.3mm pretax gross credit mark; $14.9mm pretax rate mark Fixed asset mark: $18.0mm pretax write-up on owned branches and buildings Core deposit intangible: 1.5% of core deposits Revenue Enhancements None assumed for modeling purposes Significant opportunities exist New product lines to FNBG customers; mortgage banking, wealth management, SBA Opportunity to deploy excess liquidity with new growth opportunities and larger lending limits within the Bay Area 1)A pretax charge of ~$1.8mm per year was incurred by FNBG over 2015 2017 for an accelerated accrual related to FNBGs Salary Continuation Agreements. The accelerated accrual will end at December 31, 2017. D.A. Davidson Financial Institutions Conference trico bancshares
FINANCIAL IMPACT & PRICING 52 May 2018 EPS Accretion(1) 2018e: 2.1% accretive excluding transaction costs (2) 2019e: 7.9% EPS accretion (2) TBV Impact TBV dilution of 6.6% at close TBV earnback of 4.7 years via crossover method Other Metrics Internal rate of return of >15% Improves estimated 2019 ROAA and ROATCE Pro forma TCE/TA of 9.2% at close Pricing Multiples 1)Based on TCBKs median analyst estimates from S&P CapIQ at December 11, 2017. 2)Assumes 75% run-rate realized on cost savings in 2018 (following close) and fully phased in cost savings for 2019. 3)Adjusted for an estimated $1.8mm pretax in non-recurring accelerated expense of FNBGs Management Continuity Agreements, less estimated ongoing accrual of $350,000 pretax. 4)Adjusted for $18mm pretax write-up due to FMV of owned branches and buildings. 5)September 8, 2017 represents the value of consideration based on the date when the initial exchange ratio range was determined. 6)Shows median of West Coast transactions (CA,WA,OR) since 2016 U.S. Presidential Election with a deal value between $100 million and $1 billion. Transaction multiples as of:(5) Comparable West Coast Price / 9/8/2017 12/8/2017 Transactions(6) LTM GAAP EPS 19.6x 24.0x Adjusted LTM Annualized EPS(3) 18.5 22.5 26.2x Tangible Book Value Per Share 2.13 2.60 Marked Tangible Book Value Per Share(4) 1.95 2.38 2.24 One-day Market Premium 4.8% 15.5% 36.2% rti counties bank chico. California 1975 est. trico bancshares
TRICO BANCSHARES IS COMMITTED TO: Improving the financial success and well-being of our shareholders, customers, communities and employees. rti counties bank chico. California 1975 est. trico bancshares
#YDFI(V;R'B(U277;4.PUJAOP>#FL
MNA+*]+'$5.7(&7TP/PGA=WZ1M94Y9^VR4;L$Z*NNIV,+?,JU)6;K^J?$XZOJ
MOI9J;5-%M;_/0];C%P"IKMPQ^7$8XG#UGS.Y;OV;DEF)QO)TU5*KS5/31NPO
M6E<33;(1< .:7KJ=]0JVFS,QS-@5"*C!2S*?EQQ'3K,?5_\ 43:[ R0]M@9E
M"=T"LN/3*S'.RJ>HS$C 80K=JX_J]'Y.T!$?( 62G*BU6J$(5\ L5V5H&D[V+U#U%8I)7;5RSV5U=/.49[?A5 QA8R4HRHMJD$
MX5VL <#Z G"37X0C<4XM4:H9+3VQJLB9D+J:G4=.\*_FSJK =KN$?HC %I+:
M35J4W[.A%<=*%BW,VKKOS"RNQ%2Q*E4?AQ\[.CLH46)65]2>I,T:CE*]AFVTI\KXT)-!5ZT)4O781:'R_P 5$#"UP#@M;,/EZ=3Z
M3$I*#3_ZOYJ\I.0M5W, 0>Y^(#K4J5G)6 P-=K@J&P?ICA^>6L>-JO>WZ46K
M7G(;O%&6NIJ:GHU#5DH+;C8!F0U7 +;6W0&MU9L%)Q&$UR
E4Q !^;TF]MN=JD/:\YL5:NA
MQ:Q5D;Y
MLK=VJ@Q6U68%P7*DK:RJRENWF512J$!2JD_QO08RS;NM3C;HJ,SVT+7J!:UP
MIL6RM2PA@E:8)
M55?1-"N;.5J6KOW,RY2]ES E5"C X ?;/EF7UKN&3ES6-%
MV\/7UEI3R?A/48^U8MI4NTG/SFGZ7DF^Z>]M0VI.HK[ +Z?5+\KLN+686C*]
M>97; @CYI3Q>K-TP.5Y%RY>K/52=:1)Y[9AW8.W&,83?!KC4Y5T6Y5;IHDU=
M*_VZQ:\A ^6U<&OT]O1F*UL#BW0%3/K.WYT-QQHY4%127#R'E
M;+97BI10,&M>H^!D3E+O'%/1IZ#@2&M!K949"S!S6CJ<%W/QOR_D/#^6MIJ]_P"/:E-#N.FTVM.X:/)?
MHM-K^W7J\M0O1]+JD)<@,#X3UG5_2W4/0W4F7T+O=NU#?L&Y&-[NI]Y#FE
M"%Q
]TALLX9N#N]U-V[.98E8E=2U?=U;C)I:\M5)
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MJ>'WWKK:-AWBSL%RUFY6[WK:N=WC67==NVY=;Q-NC5-7N;3MK3Y^!U]IFK+
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MGJ]/(<9\L9K-S%>?,C:/2HV
S>/]PYSY.X5O1M;5[<_'M(^MWC2<+U^JNLU
MNIV+<[[:*Z-39D?#O-6J_*%X6-X8]!=8^,T=@N[+O?2G2N%LEW<]WV_(4E=M
M?"0E._;P+DY2N3QKS=N-N[*DJ=Z[:CZJCT)]7]0[%T'//MYV!O&[W]PAB863
M;IR3[Z2C;GD0BE&-V"YG*"JJ\BE75N?PG]B?N&WG=_%VQ^'=%XJY!K-FWK=/
M&W*]BY-NVY[A^L]BVW5[I7M7+M)N/]S;AIMPT%+&ZQ<65@RJ0Q6P;="+P3\?
M-URO#?8ND+73&^W\+)N[3FXV7D7KBNXUJ=Z-G.A=]2ZKMN#